Counterfeit components find new markets

By Rob Spiegel
- April 9, 2009

Although
it’s impossible to know for sure, industry experts estimate
counterfeiting cost at $100 billion to $200 billion annually, or nearly
10% of all electronic equipment sold worldwide. Most industry experts
claim that the problem is escalating and note that, although the federal
government and several industry associations have taken measures to
limit counterfeiting, it continues to plague the components industry.

Counterfeiters are even targeting low-cost,
passive components. “Everything is getting counterfeited,” says Robin
Gray (photo), executive vice president of NEDA (National Electronic Distributors Association).
“It’s not just the high-value items, [such as] semiconductors. It can
be connectors, resistors, anything that can turn a good profit, anything
that’s on allocation, anything that’s in high demand.”

In the past couple of years, counterfeiters have
found a new market in hard-to-get parts and obsolete parts. One major
market for obsolete parts includes the industries exempt from
environmental-compliance laws, such as ROHS
(restriction-of-hazardous-substances) directives. According to Tom
Sharpe, vice president of independent components distributor SMT Corp,
the military, aerospace, and medical industries are still using
products containing lead. Many of these products are obsolete, and the
chip manufacturers no longer support them, so counterfeiters target
these parts.

Military purchasers in particular are turning to
the open market to find non-ROHS parts. “A lot of counterfeiting comes
from the fact that military customers cannot buy through the channels
they are comfortable buying through,” says Steve Schultz, director of
strategic planning and communication at Avnet Logistics, a division of
distributor Avnet Inc. “If I have 10 military customers, at least half of them will raise the question of counterfeiting.”